These explanations agree that for some reason, perhaps unrelated to economic
fundamentals, there was a loss of confidence by domestic and foreign investors in
all emerging markets. This led to a fall in capital inflows and an increase in capital
outflows that triggered, in some cases, a very large nominal depreciation and
a stock market crash. At the same time, these explanations do not address exactly
why this loss of confidence had such large effects on the exchange rate and stock
market in some emerging market countries but not in others.